Godrej Consumer expects to deliver mid-single digit volume growth in Q3

FMCG major Godrej Consumer Products Ltd (GCPL) said it is expecting to deliver a "mid-single digit volume growth" on a consolidated basis in the December quarter. In the domestic business, GCPL's organic business delivered steady underlying volume growth of mid-single digits and its inorganic business as Park Avenue and KamaSutra reported a double-digit volume growth.

"Growth was broad-based across both home care and personal care. Park Avenue and KamaSutra brands continue to perform well and are on track to achieve full-year ambition," the Godrej Group FMCG arm said in a quarterly update.

The company said its Indonesia business -- the second biggest market after India for GCPL -- continues to deliver "compelling performance" with close to double-digit volume growth and high-single-digit constant currency sales growth.

"The GAUM (Godrej Africa, US, and Middle East) business had a flattish to mild decline in volume growth. This was driven by trade destocking in geographies that we plan to restructure in Q4," it said.

Although it sustained double-digit constant currency sales growth, the impact of the Naira devaluation will result in a high-single-digit sales decline, it said.

Its Latin America (LATAM) business revenue has been severely impacted on account of the sharp devaluation in Argentinian Peso from 361 to 808, which has impacted revenue in the past nine months due to hyperinflation.

"This is likely to have a negative impact of mid-single digit on the consolidated sales," GCP said, adding, "Despite the challenging environment, LATAM business continues to deliver positive volume growth." 

"At a consolidated level (organic), we expect to deliver mid-single digit volume growth, double-digit constant currency sales growth but low-single-digit sales decline in INR terms due to GAUM and LATAM currency and hyperinflation accounting impact." 

According to GCPL, this quarterly update provides an overall summary of the operating performance and demand trends during the quarter ended December 31, 2023.

"This will be followed by a detailed performance update, after the approval of the third quarter financial results by the Board of Directors," it added.